in so many words, they accomplished the same result by
providing that the contract would not be released from escrow
until the schedule of performances had been finally arranged,
which in the nature of things would not occur until financing
was in place.
In sum, we find that this agreement contained an implied
condition that Springer would be able to obtain sufficient
financial backing to mount the production, and that his
inability to satisfy such a condition despite his best efforts
released him from any liability under the agreement.
Defendant has made much of Springer's "admission" at his
deposition that he "guess[ed]" he was "bound" by the
Detroit-based contract. In the first place, this is not an
admission of fact but the legal conclusion of a layman, which
we find to have been erroneous. Second, even if we were to
treat it as an admission that he had given assent to the
agreement in a binding fashion, such an admission would not
vitiate the effect of the implied condition which we have found
to be supported by all of the other evidence, including
Springer's trial testimony.
There is no basis for a claim against Springer for breach of
contract, and the counterclaim is dismissed.
The foregoing shall constitute our findings of fact and
conclusions of law with respect to liability. Plaintiff's cause
of action for breach of contract is dismissed, but he shall
recover against defendant Franklin on the basis of promissory
estoppel. Defendants' counter-claim for breach of contract is
dismissed. Counsel shall appear for a conference on February
22, 1989 at 4:30 p.m. in Courtroom 619 to discuss the fixation
of the amount of damages.
OPINION ON DAMAGES
This action arose out of defendant Aretha Franklin's failure
to appear for rehearsals of a Broadway musical production based
on the life and music of Mahalia Jackson. After a bench trial
on the issue of liability, we found for plaintiff,[fn1a] the
producer of that show, on a theory of promissory estoppel. We
then referred the case to Magistrate Nina Gershon for trial on
the issue of damages.
In an extremely thorough report, Magistrate Gershon
recommended that plaintiff be awarded out of pocket
expenditures totaling $52,182.12 with interest thereon from
June 20, 1984, and various unpaid debts totaling $182,181.95.
We have reviewed de novo those portions of the Magistrate's
report to which the parties have objected, and, for reasons
which follow, we accept her recommendations in every respect
but one: we find that plaintiff failed to meet his burden with
respect to the alleged debt to Tait Towers Lighting, Inc., and
therefore exclude it from his damages award.
The underlying facts of this case have been set forth in both
our Memorandum and Order of February 2, 1989 and in the
Magistrate's report. This memorandum and order assumes
familiarity with both, and sets forth only those facts
necessary to permit the parties to understand our resolution of
the issues raised by their objections.
I. Defendant's Objections
Defendant contends: (a) that plaintiff failed to meet his
burden of proof with respect to several of the unpaid debts
awarded by the Magistrate; and (b) that plaintiff's award
should be reduced by the $30,000 he received in settlement of
his claim against producers of a subsequent theatrical
production similar in concept to his own aborted endeavor.
(a) Unpaid Debts
Tait Towers Lighting, Inc.
Pursuant to a contract dated May 21, 1984 (Ex. 35), Tait
("Tait") was retained by plaintiff to construct the show's sets
for a fee of $25,000. The contract required an "earnest money
deposit" of $12,500 upon signing, and payment of the remaining
$12,500 upon the sets' completion and prior to their delivery.
Plaintiff sent Tait his personal check for the $12,500 initial
deposit. That check, however, was dishonored and was never made
good. Thereafter, Tait wrote at least one letter to plaintiff's
attorney demanding that the check be honored and threatening
criminal prosecution. There is, however, no suggestion that
Tait took any formal action to pursue a claim on the contract.
Beyond plaintiff's testimony that he had been so informed (Tr.
376), there is nothing in the record to suggest that the sets
were ever completed.
We agree that plaintiff has failed to meet his burden of
establishing this debt. Although it might be quite possible
that, even after learning that plaintiff's check had been
dishonored, Tait continued to construct the sets, we cannot say
that it is more likely than not that such would have been the
case. Indeed, it appears more probable that a contractor who
initially required earnest money before beginning work would
not proceed after discovering that it unknowingly had been
working "on spec". Tait's inaction over the five years that
this litigation has been pending further supports an inference
that no debt is owing. Accordingly, we depart from the
Magistrate's recommendation and deny plaintiff recovery for the
alleged debt to Tait.
Craft Clerical Clothes
Defendant contends that plaintiff failed to establish his
alleged debt to Craft Clerical Clothes ("Craft"), from which he
had ordered custom-made stoles and choir robes to be used as
costumes for the production. As evidenced by a check stub dated
June 4, 1984 (Ex. 5A), plaintiff made a $1,000 down payment.
Three weeks later, on June 28, Craft mailed an invoice (Ex.
44), apparently issued in the normal course of business, for
the total price of $5901.60. Accordingly, plaintiff asserts
that it owes Craft $4901.60.
Based on the foregoing, we conclude that plaintiff
sufficiently proved this debt. The evidence is fully consistent
with the inference that the robes were completed. Although
Craft may have been able to resell the robes and thereby reduce
its loss, as Magistrate Gershon properly concluded, the burden
of proving such mitigation is on the defendant, who here
"sought no discovery . . . and offered no evidence . . . to
support her speculation that such mitigation occurred." Report,
In addition, we reject defendant's contention that plaintiff
should be denied recovery for this debt because Craft's claim
against plaintiff may now be time-barred under the Uniform
Commercial Code. Such a contention is disturbing where, as
here, the limitations period, if applicable, expired during the
course of this protracted litigation. The fact that plaintiff,
through luck or negotiation, successfully staved off Craft
pending the outcome of this litigation should not accrue to the
benefit of the defendant by precluding recovery of the unpaid
debt which may enable plaintiff, at least in part, to restore
his professional integrity.
Theatre Management Associates
We reject defendant's contention that the compensation
provisions contained in the agreement (Exh. 43) between Theatre
Management Associates, Inc. ("TMA") and plaintiff "without
ambiguity or equivocation expressly limited TMA's fee to the
initial `production fee' of $12,500." Def. Objections, p. 10.
Paragraph 5 of the agreement (with emphasis added) provides
5. In consideration of the services of the General
Manager as hereinabove described, the Producer
[plaintiff] shall compensate the General Manager
[TMA] as follows:
A. Pay to the General Manager as a
production fee of $12,500; one third of which shall
be payable upon the signing of this agreement, and
the remainder due upon the completion of the
financing of the Production but in no event later
than eight weeks prior to the first day of
rehearsal. It is specifically understood
that it financing is not completed by Producer and
the project terminated no additional money shall
be due us.
B. Pay to the General Manager a weekly fee of
$1,250 commencing two weeks prior to the first week
of rehearsal and continuing throughout the entire
run of the production until two weeks past closing.
The weekly fee shall be increased by 15% commencing
one year after the first paid public performance of
C. Pay to the General Manager 2% of 100% of the
Net Profits of the production company as described
in the Limited Partnership Agreement for the
company after recoupment as provided under the
Defendant would have us construe the last sentence of
subparagraph (A) without regard to the structure of paragraph
5 as a whole. The paragraph plainly contemplates three kinds of
compensation: a production fee (sub-¶ (A)), a weekly fee (sub-¶
(B)), and a profits percentage (sub-¶ (C)). We conclude that
the limitation contained in the last sentence of subparagraph
(A) applies only to payment of the production fee, the
compensation which that subparagraph addresses. Accordingly, we
agree with the Magistrate's conclusion that plaintiff is
entitled to recover not only $12,500 for TMA's "production
fee," but also the $8,750 owed TMA for seven weeks of services.
Defendant contends that the Magistrate improperly concluded
that Simmons had completed all that he was required to do under
his contract with the plaintiff. Therefore, defendant asserts,
plaintiff should not recover the full contract fee. We
disagree. Pursuant to paragraph 1 of his contract (Ex. 40),
Simmons was obligated to write orchestrations for the
production and, in so doing, to devote such time until the New
York opening "as may be required by the Employer." In essence,
defendant contends that, although Simmons completed the
orchestrations, plaintiff should not recover the full contract
price because Simmons was not required to perform services
throughout the period during which he could have been required
to do so. As Magistrate Gershon noted, however, "there is no
evidence that more [than the orchestrations] was required as a
condition precedent to full payment." Report, p. 14. We
similarly reject defendant's contention that the "payment
schedule" set forth in paragraph 2 is at odds with recovery of
the full price of Simmons' contract. Although paragraph 2
provides that $2,000 of the $5,000 fee would be payable the
week of the show's first opening, it does not condition
plaintiff's liability for that payment on such opening.
Defendant does not dispute that plaintiff incurred the
following unpaid debts to his collaborator and
choreographer-director, George Faison: an $8,000 loan for cast
salaries, $7,587 for five weeks' services, and $498 to be
reimbursed for rehearsal space rental. Instead, defendant
contends that these debts should not be awarded because "any
debt to Mr. Faison was offset by [plaintiff's] substantial
claim against Mr. Faison for conversion." This contention lacks
merit. As noted infra, we agree with the Magistrate that
plaintiff's claim against Faison concerned injury suffered as
an author, and not as a producer. Thus, plaintiff's damages in
the form of debts to Faison are recoverable in this action
irrespective of plaintiff's claim against Faison.
Debts to Potential Investors
We reject defendant's contention that the Magistrate erred in
awarding to plaintiff $72,155 as unpaid debts owed to the
Nederlander Organization and to Meyer & Friedman. In her
papers, defendant invites us to view these entities as limited
partners who risked and lost their moneys in a failed business
venture, i.e. the production. Def. Objections, p. 19. Upon
reviewing the record, however, we agree with the Magistrate
that the suggestion that these two entities should be
considered limited partners is contrary to the weight of the
evidence. Indeed, as defendant concedes,
although a limited partnership agreement was discussed and
drafted, it was never executed.
The Magistrate properly declined to reduce the amount of
plaintiff's damages by the $30,000 he received in settlement of
his claim against the producers of a subsequent theatrical
production based on the life and music of Mahalia Jackson.
There is no basis for defendant's contention that "but for"
defendant's failure to appear plaintiff would have had nothing
to sell. As the Magistrate found, plaintiff received the moneys
in exchange for authorship rights, and not, as defendant
suggests, for his interest as producer. In short, the
authorship rights existed independently of the defendant's
failure to appear and did not flow therefrom. Although, as
plaintiff conceded on cross-examination, defendant's appearance
in the production probably would have exhausted the show's
immediate Broadway market (Tr. 548), there is no evidence to
suggest that plaintiff would have been unable at some later
time to sell, license or otherwise profit from the
property.[fn2a] Accordingly, the Magistrate properly concluded
that the $30,000 payment should not be treated as mitigation.
II. Plaintiff's Objection
Plaintiff objects only to the Magistrate's denial of
pre-judgment interest on the amount of the award attributable
to unpaid debts. We agree with the Magistrate that an award of
such pre-judgment interest would be inconsistent with the
compensatory purpose of N.Y.C.P.L.R. § 5001(a) in view of the
complete lack of evidence that plaintiff will be required to
pay interest on any of these debts.
In light of the foregoing, we adopt the Magistrate's
recommendations in their entirety except that plaintiff shall
not recover for the alleged debt to Tait Towers Lighting.
Accordingly, we direct the clerk to enter judgment for
plaintiff in the amount of $209,364.07, with pre-judgment
interest from June 20, 1984 only on the sum of $52,182.12.